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Week ahead of Holidays....
August 8 <11:49
AM EST
The
next two weeks will likely see some swings in mortgage rates that
have no direct relation to actual market conditions as investors buy
and sell bonds in order to make all their balance sheets look pretty.
If you are looking to lock in a rate in the next ten days, there will
be good mortgage rate days and bad mortgage rate days, so stay in
contact with your mortgage professional every day to make sure you
do not miss anything.
The changes will most likely be only 1/8% higher or lower than current
rates, so do not be alarmed by this news, just take advantage of anything
you can!
The rest of the week doeshave a few economic reports which could affect
rates as Tuesday we have Housing starts and the Producer Price Index
reports, Thursday we will see the Leading Indicators which will be
watched for any inflationary pressures and Friday brinds us consumer
sentiment, new home sales and durable goods orders.
The market will close early on friday for the holiday.
Updated Forecasts
Second half year of 2006 forecasts coming!
This continuing trend of higher and higher rates has caused me to
change the rate lock advisory to lock for all four stages. In addition,
I have updated my forecast to show rising rates for the second half
of 2006.
This is a combination of what we have seen in both the market and
the economic reports over the last 3 months and the continued tendencies
of the market to shoot higher of very little good news.
Now, on the bright side, the global economy is still going nowhere.
We have quite a quandary where if the market does not rise in response
to continued increases by the Fed we could see an inverted rate curve
due to the global pressures.
This is still a very good possibility and should we see anything close
to an inversion, rates could drop quickly. The very high number of
mortgages that are ARM's vs Fixed rates would switch in a heartbeat
if you can get a 30 year fixed at a lower rate than a 5 year ARM!!
If this fine line were to get crossed, you can throw all the forecasts
of higher rates right out the window.
Where are rates headed in the next 3 months?
It looks like the trend will be heading steady or higher with new
projections out and the higher oil prices and Fed rate increases driving
rates over the next 3 months
Where are rates going this year?
The entire first part of the year, I have been sticking with the experts
position that for the year of 2005, we can expect to see mortgage rates
to level out in the 6.5% to 6.75% range for a 30 year fixed rate mortgage
by the end of the year.
Although this forecast has been the same for the last 3 years and has yet
to materialize, this long term forecast must be still taken into account.
My personal expectations are that 30 year rates will be rising for the second
half of 2005 barring any more terrorist attacks.
If I were financing/refinancing
a home . . . .
I would Lock if my closing was within 10 days
I would Lock if my closing was 11- 30 days away
I would Lock if my closing was 31 - 45 days away
I would Lock if my closing was more than 45 days away
*As always, this commentary is only my personal opinion if
I were financing a home. It is only an opinion and cannot be guaranteed
to be in the best interest of any/all other borrowers.
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